Social Entrepreneurship – how to make it work

We’re talking about success and social value. Today many people lump this in a special category: social entrepreneurship.

Social entrepreneurship involves setting a social enterprise – businesses that have social change for good as their primary motive rather than profit. They typically aim at solving a social problem within the fields of environment, education, health, human rights or economic development.

To grasp the challenges of social entrepreneurship in a socialist country one must ask: Who is responsible for handling a social welfare problem? Is it the government, the companies (global or local) or may be the individual person? Because if you are going to create a business around a social welfare challenge, you first of all need to be able solve the problem, but that is not enough. You need someone willing to pay you for solving that particular problem. The challenge then arrives if everyone believes that the government should pay for all solutions solving a welfare problem. Then social entrepreneurship basically ends up being ideas created to solve the government’s problem, paid by the government.

Simon Eisner is a Swedish example of a social entrepreneur trying to break out of this mindset. His idea is to collect leftover food at stores and hand it out to people who need it, through voluntary entities like the food drive of the local church, shelters or café for homeless. This could easily be viewed as a charity setup, where the company nicely gives away surplus goods to people in need. But what are the other solutions for the store to get rid of their surplus goods? Well, they could recycle it the “traditional” way, maybe turning it into biofuel or other energy sources. But this costs money. So, why should it be free to get rid of the surplus goods by using a company that turns it into something even better that biofuel? It’s not free to find trucks, people and other equipment to run the Allwin cycle of picking up and delivering food. So it shouldn’t be free to use this service. Should FedEx help you send a package for free just because it’s a gift?

To make social entrepreneurship work it is important that this focus also gets embedded in the entrepreneur itself. – Oh, no. I cannot ask for money for salary to my staff or myself. We can do this without pay for now. To many “social entrepreneurship” companies get started based on voluntarily work and with a more or less vague hope that someone realizes how good this is for the society and jump in to pay the bill. Sorry people – this is not how it works. In a world of limited budgets, you allocate the money where new problems get solved. You don’t use them to pay already solved problems, even if the people solving them complain along the way. That’s why, in many senses, the voluntary work can actually work against it’s purpose if we want to build a sustainable business.